Air Traffic and Navigation Services: hearing on Department Budget

Meeting report

TRANSPORT PORTFOLIO COMMITTEE
12 March 2003
AIR TRAFFIC AND NAVIGATION SERVICES: HEARING ON DEPARTMENT BUDGET

Chairperson: Mr JP Cronin (ANC)

Documents handed out:
ATNS briefing

SUMMARY
Air Traffic and Navigation Services briefed the Committee on their programme and budget for 2003. Recent press coverage, including a possible slot on TV show Carte Blanche, had raised fears about the shortage of Air Traffic Controllers, and the possible implications this would have for air safety. A new system, expected to alleviate current staff pressures, is due to go online in the latter part of the year. They told the Committee that the new South African Advanced Air Traffic System, a world-standard system, is designed to automate many processes. Sixteen overseas air traffic controllers are due to arrive in the country, in order to allow South African ATC's the time necessary to be trained on the new system.

MINUTES
Dr Johan Van Vollenhouen: Managing Director, and Soemaya Boomgaard: General Manager - Finance, outlined Air Traffic & Navigation Service's (ATNS) ongoing commitments to their shareholders, in particular ATNS's commitment to being a world-class service for air traffic, a passion for safe navigation, and as a key role in aviation safety.

Dr Van Vollenhouen outlined certain key issues and strategic objectives, in particular the need for sustainable and improved service delivery. He mentioned the training of 150 Air Traffic Controllers (ATC's) over the last five years at an approximate cost of R500 000 per ATC. There are currently 122 recruits in the system, and the intention is to oversupply the market, in order to create safer skies through the allowance of decent working hours.

Currently, there is a 10% shortage of ATC's, particularly at Johannesburg International Airport. Due to a 9% growth in air traffic over the last year, there is now a fourteen hour peak, where previously two four hour peaks were experienced over the day. Staff loses are around 10% per year. Due to this, there are some delays of flights, although it was conceded by Dr Van Vollenhouen that the majority of delays are not the responsibility of ATC's.

A new system, expected to alleviate current staff pressures, is due to go online in the latter part of the year. The South African Advanced Air Traffic System (SAAATS), a new, proactive, and world-standard system, is designed to automate many processes. Sixteen overseas ATC's are due to arrive in the country, in order to allow South African ATC's the time necessary to train on the new system.

Dr Van Vollenhouen gave a brief account of key numbers, in particular the ATNS coverage of nine airports, a further twelve on contract, and a turnover for the reviewed year of R285 million.

Financial Issues
Ms Boomgaard briefed the Committee on the financial issues, in particular:
-Forecast results indicate an increase in air traffic by 6.8%, due largely to tourism.
-Expected tariff turnover increase by 17%, including an increase in tariff charges of 10.2%.
-Liquidity levels lower by approximately R4 million.
-Higher expenditure in staff, restructuring and retention, and insurance.
-Core business profit of R38 million is expected, an increase of 40%.
-Net profit before tax expected at R45 million.

On the income statement, Ms. Boomgaard reported:
-50% of the total operating cost goes to salaries.
-Electronic maintenance and telecoms among the next highest.
-If ATNS continues at the current trends, it will be a commercially viable operation, with increases in profit.

At this point, Mr A Ainslie (ANC) asked what happens to the profit.

Dr Van Vollenhouen replied that every cent goes back into the company.

Mr S Farrow (DA) asked what the other 50% in operational cost is made of.

Dr Van Vollenhouen explained that after maintenance to electronic equipment and telecommunication costs, insurance is extremely high. In fact, he says, it has tripled since the September 11 2001 terror attacks in the United States.

Ms Boomgaard continued with the Balance Sheet, mentioning in particular the funding of R143 million for the new SAAATS system. With regards to investment in infrastructure, surveillance takes the biggest chunk at R204 million.

Human Resources
Dr Van Vollenhouen placed an emphasis on leadership development, career planning and client service.

ATNS is in the process of structuring the employment demographics to make it more representative of the population. It was shown that in 1996, 84% of the positions were occupied by white males, 16% by black males. The target for 2003 is:
-37% white males.
-17% white females.
-28% non-white males.
-18% non-white females.

Dr Van Vollenhouen stressed that this is over the entire company, not just technical staff.

Progress
Dr Van Vollenhouen reported that ATNS has full radar and radio coverage of the country, with automated sequencing and handover of flights. Overseas flights to Australia are completely satellite controlled.

Due to improved service and technology, it is expected that air carriers will enjoy an approximate R94 million saving in fuel costs, by April 2004.

Discussion
Mr G Schneemann (ANC) mentioned that the situation at JHB International Airport is not new, as complaints about ATC working conditions have been coming through for the last 3 years. He asked why there are staff shortages, even though newly trained recruits sign a 5 year contract?

Dr Van Vollenhouen explained that training is a lengthy process, taking four to four and a half years. New technology in training will allow training to take place over two and a half years, the final implementation of this programme to be from May 2003.

Mr S Farrow (DP) asked how many people are to be contracted from overseas, and what the roles would be. He also asked about investments in SADC, what were the figures, expertise and equipment. With regards to tariffs, how are these determined, and how do they compare to other operators.

Dr Van Vollenhouen answered the first question by stating that sixteen overseas controllers would be arriving, and serving fifteen months. The first eight are to arrive in May 2003, the remainder over the next six months. With regards to SADC investment, Dr Van Vollenhouen replied that an investment in the VSAT system is around R20 million. As for tariffs, Ms Boomgaard chairs the committee that determines the price, in consultation with the Regulator, the carriers, and in determination of their needs. A study of benchmarked states shows ATNS as the lowest charger of tariffs.

Mr A Ainslie (ANC) asked, of the Civil Aviation Authority reported incidents, how many are related to ATC's.

Dr Van Vollenhouen replied that the figure is currently 3.2 out of every 100 000 incidents.

Ms M Coetzee-Kasper (ANC) expressed a concern over safety and delays, and asked whether an announcement can not be made over radio or television, in several languages, of all delays for whatever reason.

Mr Schneemann (ANC) asked how positions are advertised, and where staff comes from. Are there specific requirements? A second question was asked about the standards at airports such as Lanseria, whether it was to the standards of the larger airports. Thirdly, he asked about whether ATNS was assessed by any organisations.

Dr Van Vollenhouen replied that recruitment is done through technikons and universities, where they are assured of mature candidates. A strong mathematical background is encouraged. Certain selected schools, for their mathematics results each year, are canvassed by ATNS staff, who do presentations and provide brochures. Advertisements are also placed in newspapers country-wide. He added that the recruitment process itself in quite strenuous, incorporating 3D vision and short-term memory tests. Only 40 out of every 1000 applicants pass this initial screening. With regards to Lanseria Airports and others of its ilk, 95% of the infrastructure is owned and run by ATNS, providing similar high standards. Regarding assessments, Dr Van Vollenhouen said that ATNS is currently assessed by the Civil Aviation Authority.

Mr J Cronin (ANC) asked whether the ATNS structure of governance is working.

Dr Van Vollenhouen replied that ATNS is very harsh on governance, employing corporate sector staff to its executive positions. In addition to this, three committees are in existence to facilitate the management process:
-Auditing committee.
-HR and recruitment committee.
-Procurement committee (due to large amounts of buying).

Mr Cronin concluded with the statement that the increase in air movement is encouraging. South Africa appears to be turning into a hub for air traffic in Southern Africa, which is good for South Africa and will have nay have far-reaching implications for SADC countries. He conceded that the bulk of air traffic delays is not the responsibility of ATNS.

The meeting was adjourned.